What is compliance and why is hiring compliance manager a hectic practice for any organization???
In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance services basically include TDS, Service Tax, Excise Law, Company law matters, etc.
With the day to day changes/ amendments in the law it is very difficult for the companies to follow all compliance timely and in a required manner. To keep a mere track on all such crucial activities, a company needs to appoint a compliance manger. Now comes the primary concern about hiring the same, since there are serial drawbacks of hiring an in-house compliance manager as it is difficult to find one person who is good at it. However alternatively Outsourced Tax Manager will be able to provide all these services. In the current case since there are changes in the laws, it is very difficult for the companies to follow all compliance timely and in a required manner.
If we stretch more on comparing between In-house & Outsourced Compliance Manager with reference to the below briefs – we assure maximum companies would opt on hiring an Outsourced Compliance Manager against the choice of In-house Compliance Manager.
No matter what size your organization is – small, medium or large; No matter to which category of your organization is – Family run business, Multinational company, companies having branches at different locations, PE/VC invested company, start ups – no one doubt faces the growing challenges of complying with the rapidly evolving and highly complex compliance requirements. To cope up with these entire challenges one can move to hire Outsourced compliance manager. Below are the illustrative benefits of having outsourced compliance managers:
- Specialization: Outsourcing compliance benefits the company in specialization in the area of engagement. A company might face several hurdles in appointing in-house compliance due to lack of professionals in the market to act as an employee for compliance domain in the company. Further if such employees are recruited by company then also it will be difficult to have day to day regulatory awareness due to ever changing policies, laws etc.
Outsourced Compliance Manager is well versed with the various Laws, rules, regulation, policies, etc which offers specialized compliance services that perfectly meet the organization’s requirements.
- Rapid Changes in Compliance Process: As marked repetitively there is frequent change in laws, rules and regulations governing the statutory requirement to match with the pace of economic development. Because of these amendments the company may face higher cost and low quality of compliance work. Further, compliance division of company may also be affected by employee turnover in that division. To overcome with this kind of issues, one can always outsource the compliance division to avoid the danger of non-compliance which is also in a way cost effective
- Distinctiveness: Compliance outsourcing will ultimately reduce major burden on the company’s management due to employees turnover as it will be further managed by well professionals under the supervision of experienced senior member from outsourced company and there would not be any impact due to change on team members as they are professionally well trained to face such kind of scenario. Outsourced compliance managers would be a value addition for company situated at multi locations and have multi compliances to have single point of contact.
- Good Control Over Compliance Execution: One more advantage on having outsourced partners lead to good control over compliance execution with their special knowledge and vast experience. With the day to day increase in number of return to be filed with various government authorities on different subjects like, due dates, criteria etc and to comply with all these kind of requirements on time and more systematically , one should outsource Tax Filings as it would be difficult for in house employee to tackle all kind of requirements. Having Outsourced compliance manager leads to better control over the requirements of various tax authorities without any error.
- Compliance Risk Mitigation: In today’s scenario, it is really becoming hectic for the compliance managers since they are facing challenges to manage more than the preparation of policies, procedures and other taxation related work. It may include other than routine compliance work i.e. Tax Compliance Dash Board, MIS on Compliance work, Cloud based files depository system, etc. Specialists outside the organization can often address these factors more effectively, economically, professionally and timely without any hassles and most important, all these compliances shall have single point of contact which shall lead to better clarity, transparency and visibility to the management. PE/VC companies should also outsource compliance to avoid delays in their work managements and perform the same more professionally.
- Key Performance Indicator (KPI) of outsourced Tax Manager: KPI helps an organization define and measure progress toward organizational goals. KPI for Outsourced Compliance department should be to:
- Address and make sure that all the Statutory payments on time
- Filings are made in due order and within due date without fail
- Facing the challenges which comes during the functioning of the activity.
- Measure & observe how to minimize the Tax, how to strengthen the Compliance Division of the organization so that it can function smoothly.
- Automate the process of compliance division to the extent possible so that ERP & other related software are optimally utilized.
- Handling tax litigations & keeping track of the movements of all open notices from various tax departments.
As one can imagine from the above explanations, it takes lot of effort and investment for the set up of in-house Compliance Division in terms of both money and manpower. Not every organization can afford to or even want to spend so many resources in in-house compliance division and that too have a question on specialization of compliance division. Nowadays, it is absolutely vital for the business to be compliance with all laws of the country.
By Compliance Outsourcing to an experienced firm, one can ensure specialized compliance without having to hire in-house manpower and maintain separate department for it. Outsourced Compliance Manager is an ideal for solution to be compliant in all aspects of statutes of land.
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